SA must embrace open access: Ngcaba

Dimension Data Middle East and Africa chairman Andile Ngcaba has called on communications regulator Icasa and government to ensure that high-demand spectrum in the so-called “digital dividend” bands and at 2,6GHz are licensed using the open-access model of telecommunications.

Ngcaba, who is also the controlling shareholder in Convergence Partners, says open access — where infrastructure is separated from services — is the best and most sustainable model for both fixed and wireless telecoms in South Africa and in the broader region.

“South Africa is at a juncture where it is looking at [licensing]2,6GHz and the digital dividend,” Ngcaba says. “We argue that it’s the best model in order to allow an equitable environment, one where new entrants and incumbents can operate in a market that is fair from a competition point of view.”

Telecoms and postal services minister Siyabonga Cwele said in an interview with TechCentral this week that his department is working to finalise government policy on high-demand spectrum, including bandwidth in the digital dividend bands, which will become available when South Africa completes its long-delayed migration from analogue to digital terrestrial television.

Though a number of South African operators, including the largest mobile operator, Vodacom, are opposed to the idea of open access in the cellular industry, Ngcaba believes it is inevitable. “I emphasise that it’s happening everywhere in the world, in the UK, in France, in the US.”

He says open access is the best model to ensure operators can keep up with rapidly growing demand from consumers for data. It also makes sense in deploying infrastructure affordably in rural and underserviced parts of the country.

Open access is drawing attention from at least one local industry player that in the past wouldn’t have considered it. Telkom CEO Sipho Masekosaid this week that the operator’s first fibre-to-the-home deployments will provide a testbed for providing services on an open-access basis and that this may be extended to the company’s traditional copper-based digital subscriber line network over time.

In telecoms, open-access networks involve the separation of the infrastructure and services layers. Though often favoured by new entrants, the open-access model is often shunned by incumbent operators, which tend to favour a more vertically integrated approach where they provide most if not all services to end-user consumers.

Ngcaba says open access makes sense in new fibre deployments, in part because it reduces duplication of infrastructure. “One trench could be used by many operators,” he says. “We can’t have everyone with the right to dig. At the metro level, there isn’t an abundance of space alongside the street for you to build trenches for each operator.”

The same, he says, applies to the building of mobile base stations for next-generation 4G/LTE networks.

“We are talking to colleagues at the FTTH Council Africa and other bilateral [forums]to ensure there is open access in fibre. We’re also talking to the metros to say to them that the best way to build metro connectivity is open access. We’ve had the same discussions with the likes of [roads agency]Sanral to present open access as the key infrastructure development model to ensure we can provide customers with the best services.”

In underserviced parts of the country, it’s the only model that makes sense for delivering broadband, he adds. In these areas, duplication of infrastructure is simply not feasible. “Clearly, you have to have common infrastructure to provide services in rural areas,” Ngcaba says.

He downplays concerns that having only one infrastructure provider will lead to a monopoly and high prices. Pricing must be transparent, he says.

“The big problem is if the company providing the infrastructure also competes with you. You need to separate that.” — (c) 2014 NewsCentral Media

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3 Comments

Andile is absolutely right. The idea of one/two netcos and several marketcos will lead to reduced yet sustainable investments and an increased focus on different consumer segments. SA would benefit in a major way and not make the same mistakes as the EU or the US.

Lars Reichelt should be credited for the huge impact he had on the SA market in a short space of time on a limited budget.

Open Access is the only pragmatic approach for a country with as many licenses as South Africa, but it would be interesting to analyse the motives of the various players?

Telkom is trying to head off Competition Commission scrutiny resulting from its reluctance to separate wholesale and retail and to sweat its copper asset (which it hasn’t yet included in it’s open access model which is limited to new fibre build). If they were committed to Open Access, why differentiate and why not open up this ageing asset immediately? If Telkom wholesale were making the call, they would have done this years ago, but head office has decided that this is one of the last remaining strategic assets of it’s monopoly era. They have lagged in fibre investment and as a follower they cant play the monopoly game. If committed to Open Access, they will presumably start buying links from other open access suppliers such as Vumatel, so that they can deliver services to their own customers sooner rather that waste tehir scarce funding on duplication and disruption.

MTN and Vodacom studiously avoid using the term which I suspect they see as a swearword, given that they are the only two players with deep enough pockets to think with a strategic , rather than a cost efficient mindset.” Build it and control it and dont let small guys come in and mess up profit margins with irresponsible pricing like Cell C did in mobile”????